KUALA LUMPUR (May 23): Bank Rakyat has granted its customers a moratorium on repayments totalling RM6 billion, according to chief executive officer (CEO) Datuk Rosman Mohamed.

During the six-month period of the moratorium, the country’s largest Islamic cooperative bank was refraining from collecting about RM1 billion every month, he said.

But despite the huge amount involved, Rosman described the effort as highly necessary to assist society during the Covid-19 pandemic.

“Assistance should not come just from the government; the whole community must chip in. Everyone must give their solid support in getting our economy back on track,” he said during an interview on Bernama TV’s Ruang Bicara programme yesterday.

Notwithstanding the bank’s caring nature, it is strict in terms of follow-ups and debt recovery process.

“We are studying ways to ensure we can collect on the loans [after the moratorium period ends]. We will do so tactfully but at the same time, we must also give advice to the borrowers. This is a shared responsibility. If you want Bank Rakyat to be successful, if you want the bank to keep paying dividends, taxes and zakat, then it needs to move forward,” Rosman said.

The bank has nearly 900,000 shareholders. He said 70% of them were from the bottom 40% household income (B40) group.

Bank Rakyat, which has about 1.3 million customers and RM109 billion in assets, reported a group net profit of RM1.15 billion for the financial year ended Dec 31, 2019 (FY19), and declared a 14% dividend.

For borrowers from the B40 group that faced difficulties paying back even after the end of the moratorium period, Rosman said, Bank Rakyat would ensure they could still enjoy some flexibility in terms of repayment.

He, however, explained that the bank had to absorb certain costs when it gave the six-month deferment on payment obligations.

“At the end of the day, the bank needs to perform, survive and thrive. If the bank is not successful, how can it help empower the economy in the future?” Rosman said.

In addition to introducing the moratorium as part of the Prihatin Rakyat Economic Stimulus Package, Bank Rakyat has allocated RM300 million under the Bank Rakyat Cares (BRCares) campaign that runs until Sept 30.

The campaign focuses on helping cooperatives, small and medium enterprises (SMEs), women entrepreneurs and micro businesses as well as retail-based businesses affected by the Covid-19 pandemic.

“We have earmarked RM50 million for women entrepreneurs, RM50 million for micro entrepreneurs and RM200 million for small cooperatives and SMEs. The whole idea is to help them. We even give a nine-month grace period [before borrowers have to pay the first instalment],” he explained.

Going forward, Rosman said Bank Rakyat planned to open more mini branches, especially in remote areas in Sabah and Sarawak which lack banking and financial services. This may be a combination of a mini branch and Ar-Rahnu (Islamic pawn shop).

“We are also looking as a similar set-up in the peninsula, such as in Kelantan and Terengganu,” he said, adding that the plan must, however, be carefully studied as it involved capital expenditure and operational costs.

Currently, Bank Rakyat has 147 branches with more than 990 automated teller machines (ATMs) and cash deposit machines as well as 183 Ar-Rahnu X’Change outlets throughout the country.

As for overseas expansion, he said Brunei and Indonesia appeared to be attractive.

“We are not ready [to venture overseas] at present. However, Bank Rakyat is a major player in the Ar-Rahnu market, with a 50 per cent share. Recently, the Brunei government requested for collaboration with us. That may be a start.

“There may also be things that we can do in Indonesia. But to do that (go overseas), I must ensure Bank Rakyat is internally stable. If we suffered a loss, it would impact the bank as a whole,” he added.